FED POWELL TESTIMONY REVIEW: Fed Chair Powell told Senate lawmakers on Tuesday that if incoming data indicates a faster pace of policy tightening is required, the FOMC is prepared to increase the pace of rate hikes, warning that the ultimate level of interest rates is likely to be higher than previously anticipated given the string of hot data in January. That served as a marked, hawkish shift from Powell post-meeting press conference at the February FOMC, where the minutes of the meeting revealed that "[many] participants observed that a further slowing in the pace of rate increases would better allow them to assess the economy's progress". Powell reaffirmed concerns that there is thus far little signs of disinflation in core services ex-housing, noting that price stability would require a fall in this category, as well as very some softening in labour market conditions. In wake of his remarks to Senators, traders took Powell's comments as a sign that a 50bps rate rise at the March meeting, as well as a higher terminal rate, was now the base case; however, in his remarks lawmakers in the House on Wednesday, Powell added a caveat, stressing that no decision had yet been made on the outcome of the March 22nd FOMC, and again said that if the totality of the data were to indicate that faster tightening is warranted, the Fed would be prepared to increase the pace of rate hikes again, which traders took as slightly more dovish on the margin. On the Friday, data showed US average hourly earnings rising at a rate of +0.2% M/M in February, lower than the expected (and previous) +0.3% M/M; that saw the annual rate rise to +4. 6% Y/Y, a touch short of the 4.7% that the market was expecting, though still rising from 4.4% prior. The unemployment rate rose to 3.6% from 3.4%, despite expectations for an unchanged print. The cooling wages and rising unemployment rate saw pricing for a larger 50bps rate rise diminish to around 38%, vs around 50/50 before the release. Expectations of the terminal rate also inched lower to around 5.36% from around 5.45% before the release. However, the headline NFP added 311k jobs, above the expected 205k but beneath the prior revised 504k. Next week, there is a lot of data on US inflation due, with Monday's release of the NY Fed's consumer inflation expectations data for February, the CPI report on Tuesday, PPI data on Wednesday, and then inflation expectations within the University of Michigan's sentiment report on Friday - all of these come in the Fed's blackout window.